China cracks down on Bitcoin

While the Chinese government might be a big fan of market forces, it does not want to have a method of payment in the country which it does not control.

Two Bitcoin exchanges dealing in the virtual currency have been forced to suspend bank transfers from customers depositing yuan to buy bitcoins.

FXBTC said several banks had ordered it to close accounts used for taking customer deposits, due to tightened regulations from China’s central bank. Now all commercial banks and third-party payment platforms have been ordered to close all related services tied to bitcoin transfers, the exchange said.

Another exchange, BTC38, issued a similar notice, and said due to the “influence from China’s central bank” the site had been forced to revoke deposits via bank transfer.

The move was expected last month the Chinese said they wanted to tighten regulations covering the virtual currency. By April 15, the nation’s central bank would require all banks and third-party payment companies to close accounts operated by bitcoin exchanges.

It seem the enforcement is uneven one exchange, BTCTrade.com said on its website it would temporarily suspend currency transfer over the Internet, but that bank transfers were still accepted. OKCoin, said its bank transfers were still in operation.

Bitcoin was doing well in China, but the government is concerned with Bitcoin’s lack of central monetary authority, and its potential use for laundering money. So far though the government has said consumers are free to buy bitcoins.